Thread: Charges taken from benefits

I have been trying to find just how legal it is for banks to take money from benefits. I live on Disability Living Allowance and Incapacity Benefit, topped up with Income support and Council tax benefit. My money never comes into my bank account on the same day, eg,, Bank holidays, so I get OD charges slapped onto my account, which makes me short of money, so it becomes a never ending downward spiral.

For July so far I have 85 .00 already!! and for June 50-00. I have cancelled all of my DD's and have started to pay them in a lump sum,as it mainly because of them that I have got into this state, and I wanted total control of my account, but how am i expected to with the bank taking money from my account at every turn. If the money had been taken from my home it would be classed as stealing, are th ebanks actions any better?

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Hi, welcome to the forum.

First, let me say I think you are doing the right thing by cancelling your DD's and paying them yourself - you have stopped the rot of the spiralling charges, and in effect hit A&L in the pocket where it'll hurt - no more easy money out of you!

As for legality, I'm sure A&L would just say "It's all in the terms and conditions", as if that excuses everything.

Have you read round the forum and are you thinking of claiming your charges back at all? 8)

yes, I am going to do something about the charges, i cant afford to do otherwise.

I was sent this article by a friend today.. it's a bit long winded, but the threat might be enosugh we shall see, I am about to write to A & L's head office. I'll let you know the results.. but reading between the lines, they cant justify their charges.. we'll see.

Ps I just cut and pasted the relavant pieces.

However, if the sum specified in the contract is not a genuine pre-estimate of the loss that will be incurred but is excessive and is inserted in terrorem (from Latin, as a warning or deterrent, basically to frighten the other party) the courts call this a “penalty” and will not enforce it.

Therefore, in the case of financial institutions and their customers, the charges made by them because the customer has broken their overdraft limit or not made a payment on time should not exceed the damages that the bank has suffered because of the customer’s breach of contract. If the sum payable is excessive, it will become a penalty and will The damages that the bank suffers if the customer’s overdraft limit has been exceeded are:

a) the customer now owes the bank more than he or she previously did, and, obviously the bank is entitled to recover this amount, but they will do so in due course anyway plus interest (unless the customer defaults all together)

plus:

b) the costs incurred in notifying the customer of the incident. However - does it really cost a bank £20 to send a computer generated, automated letter to the customer to notify them that the account has breached the overdraft limit?

The damages that the bank suffers if they have to return a cheque or direct debit are merely the cost of sending the cheque back to the other bank or notifying them that the direct debit cannot be paid, plus the cost of notifying the offending customer. Does it really cost £30-35 to do these things when these processes are virtually all automated and computer-generated, generally without any human intervention?

It would seem to be very difficult for any bank to justify their charges as being liquidated damages and, as far as we know, there have been no cases where a bank has been prepared to go to court to defend their charges. be unenforceable by the courts.

im on incap and the misses dla and i stoped all dd and am still getting charges as the online banking shows money in but wen you draw on it they take out befoer its in constructive accounting ?